Interview: James V. Kimsey
Founding Chairman,
America Online

What was your childhood like?

James V. Kimsey: I had a fairly easy childhood. We were from a poor family, so I had to have a lot of jobs growing up, which was probably a good thing. Paper routes, caddying at a local golf course, mowing yards, the kind of thing that you would expect kids to do.

At the time I wished I had come from a rich family -- obviously, as you looked around and saw the other kids, particularly in the later years in high school, getting cars and so forth -- that I'd come from a more wealthy family. But, in retrospect I think it was probably a good thing to grow up poor because if you do achieve some success in life you really appreciate it. If I had grown up in a wealthy family I'd probably take all this for granted right now. But, I'm now like a little kid enjoying himself.

You grew up near Washington, DC, didn't you?

James V. Kimsey: I did. I grew up in a poor neighborhood in South Arlington and we'd hitchhike to school in the District. I went to school in downtown Washington.

Weren't there any schools in South Arlington?

James V. Kimsey: There were, but I got a scholarship to a private school, called Gonzaga, which was a Jesuit high school, at North Capitol and I Street, which was actually a pretty bad section of Washington then.

Values are pretty important in a Jesuit educational institution. Can you talk about that a little bit?

James V. Kimsey: The Jesuits were the sort of storm troopers of the Catholic Church; they were tough guys. At an early age, I think -- when you're 14 years old going into a Jesuit high school -- that it's a little bit of a shocking experience because they don't put up with a lot of nonsense. I think they teach you how to think. They're very big on making sure you follow logical processes in your thoughts that lead you to logical conclusions.

Was it hard coming from South Arlington and going to that private school, or was there a good mix socioeconomically at the school?

James V. Kimsey: No. I was one of the poorest kids in the school.

Were both parents in the household?

James V. Kimsey: Yes.

What did your father do?

James V. Kimsey: He was a civil servant, a GS-2. He married very late in life and was a sergeant in World War I. He became a GS-2 in the Army Map Service. My mother stayed at home. She was a nice little Irish Catholic woman who raised five kids. She was a big influence in my life. She was very supportive of continuing my education and urged me to apply for scholarships I probably wouldn't have done without her urging, and without which I couldn't have gotten the education that I got.

Did you have brothers or sisters? Where do you fit?

James V. Kimsey: Two brothers and two sisters. I'm the oldest.

Did being the oldest have any special impact? Were you in a caretaker role for the younger siblings?

James V. Kimsey: Yes I was, and that puts you in a leadership position right off the bat. It teaches you some of the responsibilities of leadership, being the oldest kid. When you're in a poor household, there's an age when you realize you don't have as much stuff as other people have. Getting enough food on the table every night is even a little bit of an issue. As the oldest, you have a responsibility to take care of your younger siblings, and I think that it becomes almost instinctive.

That seems carried through, throughout your life in various ways.

James V. Kimsey: Somewhat. It's been a natural sort of thing for me to assume leadership positions and that's what I've done.

Looking at the various things you've done in your life, it's surprising that you went to West Point. Did you originally see yourself in a military career, or were you already thinking of yourself as a business executive?

James V. Kimsey: Most kids don't really know exactly what they want. It's a very lucky high school senior who knows exactly what they want to do the rest of their life and have that single, focused passion. Most kids were like me; I really didn't know exactly what I wanted to do.

I went to Georgetown University for a year before I went to West Point. Again it was on scholarship, and I had everything paid for, but I still couldn't afford to go there. I was by far the poorest kid at Georgetown. Back in those days, West Point was somewhat idealized in TV shows.

A movie, The Long Gray Line had just come out, and so West Point had a certain cachet back then that it's gone through having less of in various times, and hopefully will regain again. So at that point, it was a free education and it looked like the kind of thing that was -- it drew me as a kid, as an 18-year-old kid, just looking at the movies, watching the episodes on TV and recognizing that there was a certain egalitarianism to the whole process, that all the kids went in equal. It didn't make any difference how much money you had or didn't have. That I think drew me.

Of course, the first week I was there, I was once again shocked and asked myself what in God's name I had done.

Why?

James V. Kimsey: It was an environment that I didn't expect. In those days they had what they called beast barracks. You showed up on the first day and you had a million upperclassmen yelling at you and having you run around. It was one of those ordeals they put you through for a year. They would make you brace at the tables. On the 4th of July they let us fall out for one meal, and I remember this kid from some southern state looked up and said, "Boy, I knew they couldn't keep this up forever," -- not realizing he had a whole other year to go. They're somewhat less stringent now in the way they handle plebes. But as Nietzsche said, "If it doesn't kill you, it will make you stronger."

I think it was a good regimen for me, because I was the kind of kid who pushed the envelope. I would always be the one that disrupted class and had discipline problems. West Point taught me a lot. I was up there recently giving a talk, and at the end of the talk one of the cadets asked me what had I taken from the West Point training that I think stood me in good stead? I indicated that "Duty, honor, country" was a given. That's just part of your make-up. But one other thing sticks in my mind.

The very first day when you reported in to West Point they said there were only three answers you could give: "Yes sir," "No, sir," and "No excuse sir." And at the time, I think the natural inclination of an 18 year-old kid is always to explain why he didn't have his shoes shined, or why he was late for formation and of course, over time they made it very clear to you that there were no excuses. And, it took a while for me to understand the deep implication of that phrase.

As leaders you don't have any excuses and you can't sort of point to other people, or external circumstances because as a leader it's your responsibility to understand external circumstances, and there are no excuses. You either take the hill, or you don't take the hill, and if you get all your people killed, then you're wrong. And, there are no excuses. There are lots of companies on the corporate American landscape that are gone because of external circumstances and the CEOs of those companies have always been able to offer excuses, but I think it's very, very important for all leaders to understand that they stand at the end of the responsibility chain and it is as Harry Truman wisely put it, "The buck stops there." It's an important concept for people to understand.

You were in combat in Vietnam. I want to ask you about your experiences in combat, and what you took from that. Was there one experience that had a significant impact on the rest of your career?

James V. Kimsey: My first tour I had a team up in what they call I-Corps, just south of My Lai. And, I took a team in after the first team got wiped out and I stayed there for a year. During that year I had about 1,100 Vietnamese irregulars that I was responsible for. Every day of that year I had at least one of those guys get killed. Some days we had big attacks and a lot more got killed. But, this was a very bad area of Vietnam.

I think, among all the things that happened during that year, it gave me an opportunity to live in a village with Vietnamese people, speak the language, get to know the people as a people, understand the nature of that conflict. And, despite the sometimes horrible incidences that occurred, I look back on that year particularly as a real growth year for myself. That I was responsible for about 100,000 square miles and 100,000 people. And, irrespective of what our policy was towards those people, I felt it was my job to protect them. And, in the process I got to know them. We built an orphanage which still exists.

Somebody asked me one time, "Don't you feel scarred by any of these experiences?" Once again, if it doesn't kill you it will make you stronger. All these things should help you grow. Having been through all of that, you're less intimidated going into a business environment. The consequences of things that happen in a business environment are not so dramatic as they are in a combat environment. So it's easier to think your way through alternatives with a cool and calm head, get to the right place, and lead your company where it needs to go.

What about the orphanage? You didn't have to do that. That was something that was very special to you, that you felt you needed to do. Why?

James V. Kimsey: My predecessor, who had been killed, had written back to people in New Orleans where he came from.

His name was Captain Rod, Ronald Rod -- R, O, D -- and before he died, he had talked in one of his letters about these little kids running around without parents. I'm sure most of the orphans we created. And, when he was killed, Time magazine did a story on him and he was made a martyr. The people in New Orleans then started raising money to build an orphanage to commemorate him. They were going to build it in a big city, and at the time I was in sort of a no-man's land in this particular team that had had many casualties over time. And, it probably was somewhat self-serving, as I raised hell and said, "No, the orphanage should be built here, in this place called Duc Pho." And everybody disagreed with that, but I raised such a stink about it they finally turned to me and said, "Fine, Captain Kimsey. You think it ought to be built there, you build it."

It was an interesting challenge, in the middle of a war, when you don't know who's VC and not VC. You've only got the surrounding people and not a lot of building technology. But After 30-some years, I was just reunited two months ago with my old counterpart, the Vietnamese district chief. I didn't even know he was alive. He found me just recently, and we reminisced about the process of how we had to find somebody to design it, and then to build it with local labor. It was an interesting sort of exercise.

More interesting, having built the orphanage I called for people to run it. Catholic Relief Service was involved, and all the organs of the U.S. government had gotten involved in at that point - -USAID, and MACV and others, which was an interesting lesson for me in how big organizations work, and how bureaucracy works.

They weren't going to send me anybody to run it because Duc Pho was such a bad place, nobody would come there. So I threatened to give it to the Buddhists, who had a temple some kilometers down the road. I said, "I'll just turn the building and the operating funds over to the Buddhists down the road. Well, I'd galvanized them, and about a week later a helicopter landed at dusk and four little bitty Vietnamese nuns got off the helicopter. They were scared to death, because they'd never been out of the big city.

I took them to the orphanage and showed them around and helped them get comfortable and went back to my little team house. We had a bunker that we'd built around the team house.

That night we got mortared, and we had tracers flying around, which was not an abnormal nocturnal experience for us. And, I remember sort of smugly saying to one of my team members I said, "Watch, those nuns are going to be back over here in the morning trying to have me get a helicopter and get them out of here." And sure enough, the next morning the little Mother Superior -- there was a Mother Superior, a nurse, a teacher and a cook -- came over and I said, "Yes, Sister, what can I do?" And she said, "Please follow me." And, she took me back to the orphanage and during the night she'd made up a punch list of all the deficiencies she's found with the orphanage. And, she took me around and showed me all these, a little crack here, little something over here, and the implication being that I had to fix them. And I thought to myself, "I think I really underestimated these nuns."

Two of those nuns are still alive and for the last 32 years have shown an amazing ability to persevere and to keep track of me, no matter where I went and what I did. So I've supported them for the last 32 years and I've been back a couple of times.

What was it like going back to Vietnam after all these years?

James V. Kimsey: The most striking thing to me when I went back in '92 and then in '95, was that they had eradicated every single piece of evidence that we'd ever been there. When I went to Saigon, I looked for MACV headquarters which had been pretty big. It was gone, completely. I went back to my old area; they had dispossessed the nuns in '75, when the communists came down Route 1, and the nuns ended up in a place called Quinh Yon. I went back to see what they'd done with the building that I'd built, thinking they'd made a school or a hospital out of it. And it was the Communist Party headquarters for the region. I had two of my sons with me, and one of my classmates who'd never been to Vietnam. I speak enough Vietnamese that these villagers knew when I walked in that I knew it used to be an orphanage.

They figured I must have been there back in the days when the guys who are in charge now were on the other side of our bullets. And, so they arrested us, this was in '92, and locked us up in a room with Ho Chi Minh starring gruffly down at us and my son -- my youngest son -- said, "Well gee, Dad, what's going to happen now?" They're grown. I mean, they weren't little kids at the time, they were in college. And I said, "Well, we don't have relations with them. They could chop us up and put us in the rice paddy and nobody will ever even know we were here." And my classmate looked at me and said, "This is another fine mess you've gotten me into."

These Vietnamese were really angry with us. They charged us with trespassing and spying. This was the only place in Vietnam, north and south, country and city, where the Vietnamese weren't happy to see Americans, which was pretty curious. I think they were still scarred by the My Lai experience, and that part of the country is less sanguine about the American presence than most of the rest of the country.

I was retarded in not thinking this up right away, but after about six or eight hours it dawned on me. This was about the same as being arrested by a rural sheriff. Finally, I asked our jailer if our crime was so egregious that there'd be a fine involved. And of course, DING! they rang back, looked it up in the fine book and sure enough it was $100 for trespassing and spying, which I promptly paid and they let us get back in our little car and get out of there. It just ensured that every American that went through that little town in the near future would be arrested.

But it was an object lesson. The Vietnamese had fought against the Chinese for a thousand years, against the French for a hundred years, against the Japanese, against the Americans for twelve years or so, which was a long time for us. Subsequently, they had problems with the Cambodians and the Chinese again, so on their timeline of conflict we were just a small dot. Half the people that live in Vietnam now weren't even born during our Vietnam War.

Do you hold out much optimism for the relationship between our two countries?

James V. Kimsey: I came in second to be the first U.S. ambassador to Vietnam. Pete Peterson, who came in first, is going to do a terrific job I think. He's a friend of mine and was an inspired choice by President Clinton. The thing I brought to the table was that I do know the Vietnamese very well and I know the American business community. I think a closer union between the two countries is in our and their best interest.

The potential for the Vietnamese people being one of our best allies in that part of the world is enormous. And, I think we're myopic not to take advantage of it. I think it's in both the Vietnamese and our best interest. Some would say less in the Vietnamese best interest because they have a very fragile and intricate social architecture that reveres their elders and has a reverence also for education. And, some think that Hollywood is now going to accomplish in Vietnam what our military failed to accomplish 30 years ago.

I think it's very important that we take some of these steps more slowly than our quarterly profit-driven American businessmen would like to do. We need to establish good one-on-one relationships with Vietnamese who may be economically naive but are about to be provided with some of the most up-to-date technology in the world. There will be some interesting socioeconomic phenomena in that country. I think it's well worth watching.

I had an interesting conversation about the Internet with La Van Bong, who's the Vietnamese ambassador to the United States. They're trying to control the Internet and control the rate at which it proliferates and how the Vietnamese people get access and what kind of things they get access to. Mostly, they were not so concerned about revolutionary political thought that might get transmitted; they were concerned about pornography.

I had to explain to them that I started a company 15 years ago -- which is short in terms of long technological sine waves, but is fairly long in terms of the proliferation of the Internet. We understand this interactive medium better than anybody on earth, and we have been unable to stem the tide of hackers and spammers. With all the resources we've thrown at these problems, they have no hope of controlling the Internet. I think it will be a democratizing influence on the country. I think the Vietnamese have some responsibility to maintain the integrity of the fine culture they've created over the last thousand years. I think it's our responsibility to respect that culture and deal with the Vietnamese in a manner that looks out for their welfare as well as our own.

I want to turn now to that business you started 15 years ago. When you left the military, did a light bulb go off over your head that said "Internet, interactivity, high technology"?

James V. Kimsey: No. People have asked me a lot of times about why I got out of the military and went into business. I've given out a few stories about why I did that; two come to mind. When I was a company commander I had the First Company from the 82nd Airborne that went into the Dominican Republic in '65. You probably don't remember, but we did have a little incursion down there. Because I had the First Company, they would use my tent as a briefing station. After we went in and divided up the city of Santa Domingo, they would bring me all the VIPs that would come to the Dominican Republic.

One of the people they brought to my tent who was a high level civilian who came into the tent for a briefing and went over to my cot, took the edge of my poncho liner and wiped off his shoe, because he had something on his shoe. And I started for him, to explain to him that that was rude and that was my poncho liner and I was -- a three-star general grabbed me by the arm and looked at my very sternly because he knew me well enough to know what I was going to do and by his look warned me not to do it. And, at that moment I realized that civilians got to tell the military what to do, and civilians with money got to say who those original civilians would be. And, so I decided that I should move to the head of the food chain.

Are you being slightly facetious?

James V. Kimsey: I'm being facetious, absolutely. Another story is that in my last tour in Vietnam I went and worked with Ambassador Colby in Special Operations. I spent a lot of time in Saigon and got to go around all of Vietnam and see the whole country in various capacities. One time I had been in a mission council mission with General Abrams, who was COMUS MACV then, and I was going to take him some stuff to look at.

After the meeting was over he was standing waiting for his jeep and he was despondent, looking down at his shoes and I was going to go over and give him a hug and tell him everything was going to be all right. And I stopped and said, "Here's a four-star general. And, if I work real hard and I'm very, very lucky I'll get to be one, and I feel sorry for him. So, I think maybe I might be in the wrong profession." Plus, at that time I was a major, and a major is one of the worst ranks in the army because it's mostly a staff position.

So you felt you had kind of run the course and you needed something else to do?

James V. Kimsey: The army was becoming less fun as I went higher in rank, and after eight years I decided that I should get out and be a businessman, without any clear idea what being a businessman was all about.

How did you find out what it meant?

James V. Kimsey: At the end of my second tour in Vietnam, I decided that I was going to get out of the army. I still had a few months before I got out of the service, so I took some correspondence business courses before I left Vietnam, and even after I got back. I talked to a number of people, and decided to go to work with this older fellow I knew who had a switch company. Actually, all I was looking for was a toehold somewhere in business. I remember thinking, "How hard can it be? Once I get a toehold I'll figure it out."

It would probably take way too long to explain the circuitous route I took to get where I am today, but I think the principle behind it was that business to me seemed sort of commonsensical. It didn't make any difference what business I was in. The basic philosophy underlying every business was the same. It was about getting people to understand the wisdom of your vision and about providing some kind of service or product to the clientele that would appreciate and want to pay you for it. I just had to figure out what those services and goods would be.

So how did you come up with interactive on-line services?

James V. Kimsey: I'd already spent a number of years in the restaurant, real estate and banking businesses. An old classmate of mine was a venture capitalist, the same one that went to Vietnam with me. He and I would take our kids on trips every summer. And this time, I guess it was 1982, we were going down the Colorado River to the Grand Canyon, and he told me about a company in the Washington, D.C. area he was investing in, that downloaded video games over the telephone.

He told me that Citicorp and a number of big name venture capital firms were investing in this. He asked me if I would like to invest in it and look it over, because I was so close to it geographically. . Because of that geographic proximity, I got more and more involved in the company as it got in trouble, like Bre'er Rabbit and the Tar Baby. This was a company that had $20 million of venture capital money and trade creditor money invested in it.

At the time, I was part of a group taking a bank holding company public and I got a questionnaire from the Securities and Exchange Commission asking me, among other things, if I had ever been involved in a company within two years of its going bankrupt. This was a standard form that everybody had to fill out. I thought to myself, "This may be the last time I'm ever able to answer no to that question." So I became very motivated to keep this company out of bankruptcy.

So with others' help, I went off to try and sell it to Apple. At the time, Jobs and Scully were rolling around on the floor, so I couldn't get their attention. So I went to a company called Commodore. I like to remind everybody at America Online that Commodore was a billion dollar company at the time, the primary main presence in the home computer market. And of course, now they're gone, liquidated for the benefit of creditors.

The guy that ran Commodore at the time was not the one that got it into bankruptcy. He and I hit it off. He was too smart to buy this company, which was called Control Video, but rather proposed that we do a joint venture. There were people in Commodore that understood how we could link up the technology of the predecessor company with some technology of a little company up in Troy, New York and come up with an on-line service that we could put on the Commodore 64 and distribute with the Commodore computer.

So, trying to jury-rig all these technologies together, trying to come up with a legal maneuver in which we could create a new entity, and convincing the venture capitalists they had to come up with yet more money was no mean feat. I had a lot of help from some of the people at Commodore. The venture capitalists -- most of whom I still stay in touch with and have become really good friends with -- helped convince their committees that it was worth putting more money into this project.

At that stage of development in a business, is it exciting?

James V. Kimsey: It's more like being in combat.

You feel like you're under siege, you're under fire. You're at a point where, if you fail to put this Rube Goldberg, very complex set of ingredients together -- that it's gone, that it craters, it's bankrupt, sort of the worst of all possible outcomes, that everything goes away -- you know, you've got the embarrassment and shame of being involved in a company and letting it fail. And this harks back to the "No excuse, Sir." I think if there's one quality that I had to point to that contributes to success, it's the same quality the little nuns had that have kept that orphanage alive for the last 32 years. It's perseverance. And, most people don't know that America Online is over 15 years old because they only see the last few years that the Internet has come in to sort of public cognition.

During these last 15 years there were many, many times that people would look at me and say, you know, "Why are you fooling around with this thing? Why do you think this is ever going to amount to anything?" In the early days, when I was forming the company, Prodigy had already been started by IBM and Sears. And, they would look at me and say, "My God, how are you ever going to compete with IBM and Sears?" And more recently they've said, "How are you going to compete with Microsoft?" A big company that has a sort of monolithic hegemony in this area that will stop you.

What was your answer to that? How could you compete?

James V. Kimsey: Because we had no resources, we were forced, like a huddled band of refugees, to use our wits, figure out how to get other people to carry our water for us. I knew the guy that ran Prodigy; he was an old IBM hand, a nice fellow. Steve Case and I would go up to White Plains to see him, and he's patronize us, but in a very friendly way. He was a very avuncular kind of fellow. He had big board rooms and a big staff; he had hired a thousand people, which turned out to be a huge burden. They made decisions by committee, while we were able to sit down and keep ourselves in the center of this sort of technological mainstream like a little speedboat.

Is that where the future of business development in the technology sector is going to be? What's going to define success: innovative partnerships, alliances, the leveraging that you've talking about? It seems like many companies start that way and, almost as a natural outgrowth, develop this huge bureaucracy and then the whole company tanks.

James V. Kimsey: This is the real challenge. IBM is a perfect example of a company that thought it was the center of the universe. Because of the hubris that surrounds that view of yourself, they woke up one day and found that the river had gone the other way and their company had washed up in the brackish backwaters of technology and the economy.

This is a challenge for any big company, and now America Online is a big company. Between Steve Case and Bob Pittman have done a terrific job of understanding the perils of thinking that you're the center of the universe. They recognize that there are people just like us sneaking through the woods and gathering strength. When they break out into the open, they're going to be so big that they will beat you. I'm mostly out of the day to day operations, but we try to be very aware that these technologies are being worked on and invented and improved all the time, not by us, but by others. We need to reach out and embrace these technologies. Folks are coming up with things that are going to make our company better and stronger over time. We need do deals with them.

You're really dealing in a field that's new territory every 24 hours.

James V. Kimsey: Most companies are involved in high technology, whether they like it or not. And to the extent that they ignore high-tech innovation is at their peril. Technology inundates everything we do, and will be more of a pervasive influence in years to come. Technology affects us at an exponential rate as we go forward, and I think all of industry has begun to understand that.

America Online has created a new medium. And we -- deliberately at the outset, because we were not sure what technologies would prevail -- did it in a very modular way. So, we don't care what the pipes are to get to the consumer, whether they're wireless, whether they're ISDN, whether they're cable, whether they're twisted pair. We've been premature in our anticipation of consumer behavior habits. We put a lot of resources into the Newton, thinking that a lot of people were going to carry those things around with them, and you haven't heard or seen a Newton in a long time.

We've made mistakes, but we'd rather make mistakes of commission, rather than omission. The Newton was a mistake of commission.

We put a lot of resources into the Newton thinking that people would carry a hand-held device around. We clearly were premature in that regard, the Newton came and went. We learned a lot. Although some would say we wasted those resources, I think we learned a lot. I think the hand-held device will be with us. I think we need to understand how people are going to use it, how we can provide the service that we provide through hand-held devices. I think at some point you'll walk into a room, there will be a flat screen on the wall and you will say, "Turn on," and it will recognize your voice and turn on. Say "Show me my bank account," it'll do that. It will show you your mail; it will show you your stockbroker's account.

And where will AOL fit into that?

James V. Kimsey: We want to be the purveyor of these services. We want you to be our customer. We want to provide all of these kinds of services to you. Our raison d'etre is that we are easy and affordable. That's why we have moved so aggressively into advertising and transaction-driven revenue streams, so that we can provide this service for less, and make it affordable to people. But the key thing is we want to make it relevant, and we want to make it very easy to use. We want the technology to come to you.

It's sort of like the early days of cars, when people had to know about carburetors, and they had to turn a crank. Now you just get in and turn a key, and there's probably more computing power in that car than there was in many of the early computers, but it's invisible to the user, and this is the way we want this technology to be. We want it to be very easy to use.

People talk about their technophobia, or say that they're computer illiterate. We want that to be irrelevant, as we go forward. It will recognize your voice; it will be as easy as turning on a light switch.

You were talking about the Vietnamese and their view of the Internet and control of content. There has been the occasional criticism of AOL for providing content that may not be suitable for children. How do you deal with criticism like that? How do you deal with criticism of the business in general?

James V. Kimsey: We've certainly had our share of well publicized difficulties, when we changed our pricing structure, and the inability of people to get on the service and access it. The very thorny question about censorship and pornography is one that we've taken a pretty firm stance on. I've given talks about what the role of on-line services should be. People are concerned about Big Brother and censorship and we don't think we should be like the telephone company. We should not -- nor can we -- monitor the traffic and the content. We do, however, think that we can play a large role in providing parents with tools that restrict their children's access to material that they would find objectionable.

Every new medium has this difficulty. The second book off the Gutenberg press was an erotic book. Parents have the primary responsibility for teaching their kids how to deal with objectionable material, because they will come in contact with it. To think that a child will not be exposed to these kinds of things is very, very naive. It's more important to give the child the kind of values that help them deal with this kind of stuff, because it's everywhere, and they will be exposed to it sooner or later.

As a business person, do you think criticism itself is helpful because it does help you think about the next wave?

James V. Kimsey: In an interactive medium we have to be very sensitive to criticism. That's the feedback that you get to help you improve your product and do the kinds of things that you're supposed to do.

One of our very strong initiatives is to make America Online one of the world's most respected companies. It has had maybe a reputation of being somewhat too slick by half. Cleverness might have been a core value because you've got a lot of bright kids that want to show how smart they are. And, we've taken a different tack now in that we started a foundation that I chair. We want to take the highest sort of moral ground on all issues, so that we get the trust and respect of people, and don't find ourselves in a Microsoft position, being favorite targets of legislators and regulators.

It's interesting that you chose to leave active operations and go into philanthropy. What governed that move?

James V. Kimsey: We used to have these meetings in the basement at AOL and get all the employees in one room. I gave a talk to the AOL employees a couple of weeks ago, and we took out the Patriot Center, which is a huge facility near Washington. It had satellite hook-ups to all the other locations around the world and I told the employees about the creation of the foundation.

It started off with an explanation. I wasn't sure how they led their lives but speaking for myself, as you go through life, typically you run into challenges and difficulties. Many times you talk to somebody up there somewhere and make little deals: "If I can get through this test..." "If I can get through this fire fight. If I can come out of this particular battle alive..." "If I could get over this brush with bankruptcy..." Whatever challenge you happen to face, consciously or subconsciously you make little bargains that you'll be a better person, or you'll do the right thing. And someday, when you get to the place where you always wanted to be, something happens. I heard this big voice go, "Well?"

I think America Online has gotten to that point. It is a much bigger company than people predicted it would be in its incipiency. It's gotten to a very central position and, as a result of that, it has terrific social obligations, to my mind. Not only is the strategy to avoid the regulators and the legislators, but I think people want to work for a company that has lofty ideas that are driven by higher goals than earnings per share and stock price.

I think there's a growing disparity between the information haves and have-nots. Pretty soon the kids from the inner city are not going to be able to get a job at McDonald's if they're not technically qualified. I think a company like America Online has a unique responsibility to do what it can to narrow the gap between the information haves and have-nots.

Will you be providing technology to kids, or providing access to interactivity, or teaching kids, or all of those?

James V. Kimsey: All of the above, but my job is to figure out how to do that in ways that are scaleable and can be done with great efficiency.

Is that more fun than running a business?

James V. Kimsey: I'll be mostly a figurehead and I'll give speeches now and again. In some ways it's like starting AOL all over again.

I'm doing projects in Washington, D.C., about what's wrong with the educational system and how it can be fixed. And, how you can reach these kids who, I think, are going to represent -- they're going to be the kids that hijack your car. And, if you don't reach out to them early on they're going to recognize that we have a great proliferation of wealth in the country and they're not participating. If you don't reach out to them and try to help them, I think it's going to be at your long-term peril. I think as a social obligation, it's not something that a government is particularly well organized or well resourced to do. I think Corporate America has that responsibility primarily, in my mind.

I've found the people that inhabit this philanthropic world a little bit different than the people I'm used to in the military and business world.

How so?

James V. Kimsey: They seem to be more interested in process than results. I've had a difficult and somewhat frustrating time trying to figure out who's doing what to whom. What studies have been done? What moneys have been spent? Washington, D.C. is a great example. Of any school system in the country, it has spent the most money per kid, and it has the worst result in terms of test scores. It's criminal, in my view. I think some of the people associated with that should be in jail.

I think somebody like me has got an interesting set of qualifications to try to attack this problem, because I have no other motivation than trying to help the kids. We have a bully pulpit in AOL, and we have some resources, and it's my challenge to figure out how to focus those resources laser-like on the problem and get results. It's easy to talk about this, but my challenge is to figure out how to do it. I don't know yet exactly how it's going to get done.

Over the last 10 years we're been seeing a shift in corporate-based philanthropy, going to a much more results-based pattern of giving.

James V. Kimsey: In Washington, for instance, there's a place called Anacostia that's sort of the epitome of the inner city. People typically have sort of thrown money over the Anacostia River and hoped something good happens over in Anacostia. After I talked with my staff and all the folks that are working on this, I said, "We're going to go do something in Anacostia." I'm going to open a learning center over there. Whether it's the right place, or the right formula, I don't know yet, but we're just going to go do it. I'm going to physically go spend some time in Anacostia and be seen to spend some time in Anacostia, so I begin to understand the dynamics of poverty and how it goes from generation to generation. Let's find out what we can do to help these kids and get them out of this vicious circle.

That's very much the approach you took in Vietnam, when you lived in the village and got to know the people.

James V. Kimsey: Sometimes there's just no substitute for understanding at a grassroots and hands-one level what really is going on and what the people are doing. I think it sends a signal. All these limousine liberals talk nicely about these issues, but the results are not occurring. The U.S. educational system is terrible, and it's our fault for letting this happen.

Do you miss being involved in AOL directly?

James V. Kimsey: No, I don't. What I do is start things. I don't have an interest in running something in a routine way, although it's certainly not routine to run America Online. My view is that the primary responsibility of every CEO is to figure out the succession. Most people don't do that, and I think that inures to the detriment of the organization. You have to start figuring it out. What if I get hit by a car tomorrow? The leader of anything should never do anything routinely. There are enough things that are not routine that he's going to get caught up in, to ever have to be doing anything routine. You have to delegate.

I've always believed in delegation. For my own self, I've always wanted to do something different every five to ten years. In this case I've been a little retarded; it's taken me 15 years to change venues. I've changed venues from things that are commercially driven, because they're not relevant to me anymore. I mean, you can only spend so much money.

There's only four things you can do with your money: you can give it to the government, you can spend it, you can give it to your ungrateful kids to their detriment. And my sons -- I have three -- all understand this. I never want to deprive them of the wonderful feeling of making it on their own. I don't think you do your kids a favor by leaving them a lot of money, or letting them think they're working with a net. And so, the fourth and final thing you can do with your money is give it to charity, or do something good with it. And I think it's incumbent on everybody with any amount of money at all to start thinking like that.

And it's not enough to just write checks to people. You have to think about where the money is going and how efficiently it's going to be used. So that's my new ambience now. That's the direction that I want to go in.

Was there any special person that you would consider your mentor?

James V. Kimsey: No, and I miss that. I've been asked that before. There were a couple of army officers. When I was Secretary of General Staff out at Fort Lewis, there was one colonel -- he was the Chief of Staff -- who made me understand that staff work wasn't all just boring things, that it was necessary, and if done well it could have big impact. There were a couple of people in my life that I watched do things and they did have an impact on me, but there was no great mentor I could point to. I'm sorry for that; I wish I had had one at some point.

Have you served as mentor to someone?

James V. Kimsey: I hope so.

Was there a book that you turned to in your youth, or even now?

James V. Kimsey: When I was younger I was a voracious reader. As a young boy in a poor family, with not many outlets, books became sort of my window on the world. There were too many to mention. Adventure books were particularly interesting to me. I think my sense of adventure and the things I've done -- even in recent years, going to Bosnia, and going to Cambodia, all these kind of things -- appeal to me more than sitting in an office and thinking about office kinds of things.

I'm somebody that likes to go places and do things, much more than sit in an office. That's one of the things that has motivated me as I ask myself, "How much time have I got left?" As I check off the long list of things I want to do before I go, I find that the list doesn't get shorter; it grows longer. I want to go to all the places on the globe that I can possibly get to, just to see them.

I hope you do. Thank you for talking with us.